Currently POET trades at an enterprise value of $358 million using a fully diluted share count. We need to look further out to where we think revenues would be by 2025. If we say the joint venture is able to reach $200 million in revenues by then and the rest of the business can ramp to $100 million that would be $200 million in revenues for POET in 2025. Using 11.3xs gives us an enterprise valuation of $2.26 billion, a market value of $2.28 billion or $5.64 per share by 2024 using today’s fully diluted share count of 404 million shares. This would be a present value of $1.97 per share discounted by 30% per year.
POET’s business model would make it similar to fabless semiconductor companies. Third parties would provide the production of its devices and we expect it would have margins similar to those companies below. They trade at an average of 11.3xs enterprise value to estimated 2021 revenues. We have added SCPE to our comps. It is a SPAC that just bought Rockley Photonics, which is POET’s closest competitor. That company is valued at an enterprise value of 30 times 2021 sales.
Keep it real, thanks
Cheers
